Decision pending in gas deal

RECENT difficulties between governments and companies with stakes in Timor Gap gas development projects may deliver WA a win.

Sasol Chevron is due to decide on the location of its northern Australian gas-to-liquids (clean diesel) plant, carrying a start-up date of 2005-2006, and the Pilbara is looking decidedly more attractive than Darwin.

Phillips Petroleum’s plans for a major pipeline delivering Timor Gap gas to Darwin are on hold, following unsatisfactory prod-uction tax negotiations with East Timor and Shell’s alternative offshore proposal.

Sasol Chevron’s plans require an onshore gas supply equalling the total proven reserves off the Northern Territory coast, making the logical location decision appears to be the Burrup Peninsula.

Should the Sasol Chevron location decision go WA’s way, the fuels plant will become the second largest consumer of NWS gas and the State’s second largest industrial development, after the NWS venture.

Sasol Chevron is yet to make the big decisions and, not having signed a gas contract, has not officially ruled out any sites.

The joint venture, with more advanced plans for similar projects in Nigeria and Qatar, is still considering the project economicst.

Gas prices and fiscal and regulatory regimes are huge considerations, and, although Sasol Chevron has consistently maintained it wants a plant in Australia, the company is keen to see next month’s Federal Government’s GTL Taskforce report before moving beyond the feasibility stage.

Sasol Chevron has a team of 14 in Perth and expects this to grow to 40 within a year.